COOLING AND HEATING AS A SERVICE MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2025-2032)

Cooling and Heating as a Service Market Size and Forecast – 2025-2032

The global cooling and heating as a service market is estimated to be valued at USD 85.13 Bn in 2025 and is expected to reach USD 176.45 Bn by 2032, exhibiting a compound annual growth rate (CAGR) of 11% from 2025 to 2032.

Key Takeaways of the Cooling and Heating as a Service Market:

• The subscription-based segment is estimated to account for 35.4% of the market share by 2025.
• The cooling as a service segment is projected to comprise 56.7% of the market share by 2025.
• The residential segment is estimated to represent 37.9% of the market share by 2025.
• Asia Pacific is projected to lead the global market with a 34.5% share in 2025, followed by North America which is estimated to hold a 21.5% share in 2025.

Market Overview:

The cooling and heating as a service market is experiencing significant growth due to the increasing adoption of energy-efficient and sustainable heating and cooling systems. This surge is driven by the global push to lower carbon emissions and improve energy efficiency in buildings. Companies like Enwave Energy Corporation are transitioning to subscription-based centralized heating and cooling systems, allowing them to minimize upfront capital expenses while enhancing operational efficiency. Additionally, the rising cost of energy is boosting the demand for optimized temperature control solutions and pay-as-you-go service models.

Segmental Insights

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Service Model Insights - Convenience and Cost Savings Drive the Demand for Subscription-Based Services

In terms of service model, the subscription-based segment is estimated to contribute 35.4% of the market share in 2025, owing to the convenience and cost savings it provides to customers. With subscription-based services, customers receive on-demand access to cooling and heating utilities without having to bear high upfront installation and equipment costs. This makes it affordable for residential and commercial customers looking for flexible and low-cost solutions. Furthermore, subscription plans offer predictable and locked-in pricing over the contract period, helping customers better manage their cooling and heating expenses. 

Service Type - Rising Popularity of Cooling as a Service

In terms of service type, the cooling as a service segment is expected to contribute 56.7% of the market share in 2025. This is mainly due to increasing demand for specialized temperature and humidity control across various settings. Rapid urbanization and growth of IT infrastructure in developing regions have boosted the requirement for process cooling and spot cooling systems. Meanwhile, changing weather patterns and rising average temperatures worldwide have heightened the demand for space cooling equipment in commercial buildings and households. 

End User Insights - Residential Segment Leads Due to Changing Lifestyles

In terms of end user, the residential segment is expected to contribute 37.9% of the market share in 2025. This segment is growing rapidly due to changing lifestyles and evolving homeowner preferences. With dual-income families and hectic schedules, residential customers are increasingly opting for hassle-free climate management services rather than owning and maintaining their own Heating, ventilation, and air conditioning equipment. The subscription-based model fulfills their need for convenience without long-term commitments.

Regional Insights

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Asia Pacific Cooling and Heating as a Service Market Trends

The Asia Pacific region is projected to lead the market with an estimated share of 34.5% in 2025. This dominance can be credited to several factors, including the strong presence of established service providers, supportive government initiatives aimed at boosting energy efficiency, and widespread consumer adoption of subscription-based models. Rapid urbanization and economic growth in countries like China, India, and Japan are driving the demand for decentralized HVAC solutions. Furthermore, government incentives promoting green technologies are motivating both global and local companies to explore opportunities in key urban areas.

North America Cooling and Heating as a Service Market Trends

North America is projected to hold 21.5% of the cooling and heating as a service market share in 2025. North America region exhibits the fastest growth and is expected to emerge as a key market going forward.  The cooling and heating as a service market growth can be attributed to factors such as the significant presence of well-established service providers, favorable government policies promoting energy efficiency, and high consumer acceptance of subscription-based services. Major players like Carrier Corporation and Johnson Controls International have expanded their footprint and service offerings across both residential and commercial sectors.

Cooling and Heating as a Service Market Outlook for Key Countries

U.S. Cooling and Heating as a Service Market Trends

The U.S. market for cooling and heating as a service is projected to grow significantly, driven by the increasing demand for energy-efficient solutions and sustainability initiatives. Companies are increasingly adopting subscription-based models to provide heating and cooling services. For instance, in February 2024, Carrier Global Corporation launched "BluEdge," a subscription-based service platform designed specifically for cold storage warehouses in the U.S., offering 24/7 monitoring and predictive analytics to enhance operational efficiency.

Germany Cooling and Heating as a Service Market Trends

The cooling and heating as a service market in Germany is experiencing notable growth, driven by emphasis on energy efficiency and sustainability. Germany's commitment to reducing carbon emissions has led to the increased adoption of energy-efficient heating and cooling solutions. In 2023, approximately 75% of newly approved buildings incorporated heat pumps, with 65% of the 96,800 residential buildings completed that year utilizing heat pumps as their primary heating source.

China Cooling and Heating as a Service Market Trends

China cooling and heating as a service market is expanding rapidly, fueled by urban growth and environmental regulations. Key players include Haier, Midea, and Gree Electric Appliances, which are leading innovations in this sector. For example, Haier has launched an integrated energy management system that optimizes cooling and heating for commercial buildings, achieving energy savings of over 30%. Midea has introduced a subscription-based model for residential air conditioning units, making energy-efficient solutions more accessible. Gree's partnership with local municipalities has resulted in the rollout of smart district heating systems, enhancing energy efficiency across urban areas.

India Cooling and Heating as a Service Market Trends

India cooling and heating as a service market is witnessing significant growth due to rising energy demands and a push for sustainable solutions. Key players in this sector include major companies like Tata Power, Voltas, and Blue Star, which are innovating in energy-efficient technologies. For instance, Tata Power's initiatives in smart cooling systems, which reduce energy consumption by up to 30%. Voltas has introduced a pay-per-use model for commercial refrigeration, making it accessible for small businesses. Additionally, Blue Star's partnership with local governments promotes the adoption of eco-friendly cooling solutions.

Brazil Cooling and Heating as a Service Market Trends

Brazil cooling and heating as a service market is evolving rapidly, driven by urbanization and the need for energy efficiency. Key players include Embraco, Trane, and Carrier, each contributing to innovative solutions. For instance, Embraco has developed energy-efficient compressors that enhance cooling performance while minimizing energy consumption. Trane's deployment of smart thermostats in commercial buildings has demonstrated a reduction in energy costs by up to 25%. Carrier's collaboration with local governments promotes the adoption of district cooling systems, significantly lowering operational expenses for large buildings.

Market Players, Key Devlopment, and Competitive Intelligence

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Key Developments:

• In February 2024, Carrier Global Corporation, a leading provider of heating, ventilation, and air conditioning (HVAC) systems, launched "BluEdge," a subscription-based service platform designed specifically for cold storage warehouses in the U.S. The platform includes 24/7 monitoring and predictive analytics to enhance operational efficiency and reduce downtime.
• In December 2023, ColdHubs Ltd., a Nigeria-based company specializing in solar-powered cold storage solutions, expanded its services to West African nations. This initiative aims to meet the growing demand for off-grid agricultural cold storage, supporting farmers in reducing post-harvest losses and preserving produce quality.

Top Strategies Followed by Global Cooling and Heating as a Service Market Players

• Established players focus extensively on research and development to innovate high-performance products
  • For example, Companies like Daikin, Carrier, and Johnson Controls invest over 5% of their annual revenue in R&D. Their intensive research has led to the development of energy-efficient and eco-friendly technologies. These companies also pursue strategic partnerships with suppliers, component manufacturers as well as technology startups. Such alliances help them gain access to innovative solutions and strengthen their product portfolios.
• Mid-level players have carved a niche by delivering cost-effective solutions targeting price-sensitive segments. While ensuring decent product quality, companies like Trane and Lennox provide budget-friendly options to attract cost-conscious consumers. These players also engage in collaborations with local manufacturers to boost production capabilities and market penetration. Certain mid-size companies partner with technology firms to integrate advanced features in their products without investing huge capital in independent R&D. This helps enhance their offerings and differentiates them in the marketplace.
• Small-scale players focus on specializing in specific industry verticals or construction segments like hospitals, hotels, etc. This niche concentration allows addressing the unique needs of such customer groups. Some small-scale ventures have embraced new technologies like IoT, AI, and cloud computing. Adopting emerging innovations helps stay aligned with future market trends and remain competitive against larger corporations. These niche players also leverage alliances with regional startups and local associations to establish initial market presence.

Emerging Startups - Cooling and Heating as a Service Industry Ecosystem

• Innovative Technologies: Several startups are bringing innovative technologies that can influence the industry's dynamics. Companies like EnergyX are developing advanced smart sensors and integrated control systems powered by AI/ML. Their solutions help optimize energy usage for HVAC equipment in commercial buildings. Atomberg utilizes nanotechnology to manufacture eco-friendly refrigerants with zero global warming potential.
• Sustainability Solution: Sustainability is a key focus area for emerging startups. For example, Influence is commercializing geothermal heat pump solutions that can reduce energy consumption by 30-60% compared to conventional systems. Climavore recycles refrigerants from decommissioned units to provide reclamation services. Their efforts help lower the environmental footprint of HVAC systems.

Market Report Scope

Market Dynamics

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Cooling and Heating as a Service Market Growth Factors

Rising demand for energy-efficient and sustainable building solutions

One of the key drivers propelling the growth of the market is the rising demand for energy-efficient and sustainable building solutions across both commercial and residential spaces. With growing environmental consciousness and stringent government regulations aimed at curbing carbon emissions, building owners and operators are under increasing pressure to reduce energy consumption and adopt greener operations. Cooling and heating solutions delivered as a service help address this demand quite effectively. With cooling and heating as a service (CHaaS) offerings, building owners can meet their sustainability goals without having to make significant upfront investments in HVAC equipment or carry the operational and maintenance responsibilities long-term.

Cooling and Heating as a Service Market Challenge - High initial setup costs for service providers

One of the key challenges faced by service providers in the market is the high initial setup costs involved. Providing cooling and heating services requires significant investment in installing the necessary infrastructure such as ductwork, HVAC equipment, and control systems. Additionally, service providers need to invest in developing monitoring solutions to remotely manage these systems. This leads to a substantial capital outlay in the initial phases. For smaller and new entrants, arranging such large funds can be a major hurdle. The long payback period associated with these investments due to high fixed costs also discourages many potential players.

Cooling and Heating as a Service Market Opportunity - Increasing Investments in Renewable Energy Sources

One of the major opportunities for the market is the rising investments in renewable energy sources around the world. With growing climate change concerns, many countries are aggressively promoting the use of clean and green energy technologies like solar, wind, biomass, etc. Service providers can capitalize on this by integrating such renewable systems with their cooling and heating solutions. For example, they can install roof-top solar panels or invest in community solar/wind farms to power the equipment. Leveraging renewable energy reduces dependency on fossil fuels and lowers operating costs in the long run. 

Analyst Opinion (Expert Opinion)

• The global cooling and heating as a service market is witnessing strong growth driven by the increasing adoption of energy-efficient and sustainable HVAC systems. The pay-per-use business model of these services allows commercial users to avoid large upfront capital investments and focus more on their core business. Asia Pacific currently dominates the market due to severe winters and widespread awareness about energy conservation. North America region is expected to emerge as the fastest growing market.
• This market still faces challenges from the lack of standardization and scalability issues in servicing varying building infrastructure globally. Additionally, shifting to shared economy model of procurement requires change management at the user level. The market potential can be further unlocked by offering customized service level agreements and expanding remote monitoring capabilities.
• New product development focusing on low carbon solutions and integrating with smart building technologies also presents lucrative opportunities. Partnerships between service providers and technology giants will help accelerate digital transformation of these services. Further policy pushes to reduce carbon footprint of buildings especially in Europe is likely to stimulate additional demand. Service providers diversifying into adjacently located geographic markets and customer segments have brighter growth prospects.

Market Segmentation

•  Service Model Insights (Revenue, USD Bn, 2020 - 2032)
  • Subscription-Based
  • Pay-per-Use
  • Hybrid Models
  • Others
•  Service Type Insights (Revenue, USD Bn, 2020 - 2032)
  • Cooling as a Service
    • Process Cooling
    • Space Cooling
    • Spot Cooling
  • Heating as a Service
    • Process Heating
    • Space Heating
    • Radiant Heating
•  End User Insights (Revenue, USD Bn, 2020 - 2032)
  • Residential
  • Commercial
  • Industrial
  • Others
• Regional Insights (Revenue, USD Bn, 2020 - 2032)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Key Players Insights
  • Johnson Controls International plc
  • Siemens AG
  • Schneider Electric
  • Trane Technologies plc
  • Honeywell International Inc.
  • Daikin Industries, Ltd.
  • Carrier Global Corporation
  • Mitsubishi Electric Corporation
  • Bosch Thermotechnology
  • Lennox International Inc.
  • Veolia Environnement S.A.
  • ENGIE
  • Comfort Systems USA, Inc.
  • Rinnai Corporation
  • United Technologies Corporation